@article{Narayana:283427,
      recid = {283427},
      author = {Narayana, Badri G. and Hertel, Thomas W. and Horridge, J.  Mark},
      title = {Linking Partial and General Equilibrium Models: A GTAP  Application Using TASTE},
      address = {2010-02},
      number = {1236-2019-170},
      pages = {49},
      year = {2010},
      abstract = {CGE models are utilized for the evaluation of trade policy  reforms, yet they are typically highly aggregated, limiting  their usefulness to trade negotiators interested in impacts  at the tariff line. Partial Equilibrium (PE) models used  for disaggregate analysis lack the benefits of an  economy-wide analysis required to examine the overall  impact of trade policy reforms. This suggests the need for  a PE-GE, nested modeling framework to support trade policy  analysis. In this paper, we develop a PE model that  captures international trade, domestic consumption and  output, using CET and CES structures, market clearing  conditions and price linkages, nested within the standard  GTAP Model. In addition, we extend the welfare  decomposition of Huff and Hertel (2001) to this PE-GE model  to contrast the sources of welfare gain among models. To  illustrate the value-added of this model, we examine the  impact of multi-lateral tariff liberalization on the Indian  economy, with special focus on the auto sector, using PE,  GE and PE-GE models. The PE model does not predict the  change in overall size and price level for the industry  well, while the GE model underestimates the aggregate  welfare gain due to tariff averaging. It also fails to  account for the change in industry composition resulting  from trade reform. These findings are robust to wide  variation in model parameters. We conclude that the linked  model is superior to both the GE and PE counterparts. },
      url = {http://ageconsearch.umn.edu/record/283427},
      doi = {https://doi.org/10.22004/ag.econ.283427},
}